TOKYO (Reuters) - Japanese shares hit a
three-month high on Monday morning after a solid U.S.
May jobs report provided the latest confirmation of slow
but steady improvement in the world's largest economy
and its labor market.

The benchmark Nikkei gained 0.5 percent to 15,156.32 by the midday
break, after rising as high as 15,206.57, a level last seen on March
11. The index has gained about 445 points, or more than three
percent, over the past five trading days.

"Japan remains the best and most leveraged play on the U.S.-led
upturn in global growth that we expect to continue for the next few
years," wrote Trevor Greetham, director of asset allocation at
Fidelity Worldwide Investment on the company's official blog.

On Monday, Japan revised up its growth number for the first quarter,
which grew an annualized 6.7 percent, compared with the initial 5.9
percent reading. Analysts said the upward revision didn't boost the
Nikkei as it was in line with expectations.

The Nikkei's steep gains in the past week raised concerns that the
market may be overbought in the very near term, and some investors
were selling into the rally.

The Topix's 14-day relative strength index rose above 70 and the
up-down ratio, the ratio of the number of shares that rose over the
past 25 sessions divided by that of falling shares, was well above
120, both seen as indicating an overbought zone.

Wall Street closed at all-time highs on Friday after figures showed
that U.S. employers kept up a solid pace of hiring in May, returning
employment to pre-recession level and offering confirmation the
economy has snapped back from a winter slump.

"The U.S. jobs data was strong but came in very much as expected,"
said Mitsushige Akino, chief fund manager at Ichiyoshi Asset
Management.

"The Tokyo market merely followed the movement of U.S. markets.
Given that we are hovering in the overbought levels already and
there is no real catalysts domestically, it would be difficult to
drive the momentum further."

But investors seem relatively bullish on the market, rotating into
high beta shares - those with high volatility -- from defensive
shares.